FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2012

FAIR VALUE MEASUREMENTS

NOTE 5 – FAIR VALUE MEASUREMENTS

The following tables summarize our available-for-sale securities measured at fair value:

	September 30, 2012		Level 1		Level 2		Level 3
	(Unaudited) (In thousands)
Mutual funds(1)	$	1,998	$	—	$	1,998	$	—
Commercial paper		42,480		—		42,480		—
Asset-backed securities and collateralized mortgage obligations(2)		8,595		—		2,138		6,457
Corporate notes and bonds(3)		5,761		—		5,761		—
Total	$	58,834	$	—	$	52,377	$	6,457
	December 31, 2011		Level 1		Level 2		Level 3
	(In thousands)
Mutual funds	$	1,923	$	—	$	1,923	$	—
Commercial paper		123,210		—		123,210		—
Asset-backed securities and collateralized mortgage obligations		8,131		—		2,101		6,030
Corporate notes and bonds		5,742		—		5,742		—
Total	$	139,006	$	—	$	132,976	$	6,030

⁽¹⁾  Various U.S. equities and other investments managed under mutual funds.

⁽²⁾  Asset-backed and mortgage-backed securities with maturities of up to 26 years.

⁽³⁾  Corporate notes and bonds with maturities of three years or less.

Our Level 2 investments consist of commercial paper, corporate notes and bonds, asset-backed commercial paper notes backed by a pool of mortgage-backed securities and mutual funds. The fair value of our Level 2 investments was determined using a market approach which is based on quoted prices and other information for similar or identical instruments.

Our Level 3 investment consists of asset-backed commercial paper notes backed by a pool of mortgage-backed securities. The fair value of this Level 3 investment was based on the calculation of an overall weighted-average valuation, using the prices of the underlying individual securities. Individual securities in the pool were valued based on market observed prices, where available. If market prices were not available, prices of similar securities backed by similar assets were used.

Changes in Level 3 Instrument

The following is a summary of the changes in our Level 3 instrument measured on a recurring basis for the three-month and nine-month periods ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(Unaudited) (In thousands)
Balance at beginning of period	$	6,338		$	7,072		$	6,030		$	7,372
Total realized and unrealized gains (losses)		459			(318	)		1,357			147
Principal repayments		(340	)		(351	)		(930	)		(1,116	)
Balance at end of period	$	6,457		$	6,403		$	6,457		$	6,403

Unrealized Losses on Investments

Our net unrealized loss on investments was $2.7 million and $4.4 million at September 30, 2012 and December 31, 2011, respectively. The investments in an unrealized loss position for twelve months or longer are asset-backed and mortgage-backed obligations. These investments have generally shown a positive trend, continue to perform and we currently do not have the intent to sell these securities before their anticipated recovery. Based on our analysis of these investments, we believe that none of our available-for-sale securities were other than temporarily impaired as of September 30, 2012. The amount of investments in an unrealized loss position for less than twelve months was not significant for either of the periods presented. The following is a summary of our available-for-sale securities with unrealized losses greater than twelve months:

	Twelve Months or Greater
	Fair Value		Unrealized Losses
September 30, 2012	(Unaudited) (In thousands)
Mutual funds	$	1,998	$	—
Commercial paper		42,480		—
Asset-backed securities and collateralized mortgage obligations		8,595		(2,742	)
Corporate notes and bonds		5,761		—
Total	$	58,834	$	(2,742	)
	Twelve Months or Greater
	Fair Value		Unrealized Losses
December 31, 2011	(In thousands)
Mutual funds	$	1,923	$	—
Commercial paper		123,210		—
Asset-backed securities and collateralized mortgage obligations		8,131		(4,358	)
Corporate notes and bonds		5,742		—
Total	$	139,006	$	(4,358	)

Other Financial Instruments

We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values.

Short-term and long-term debt. The fair value of debt instruments is classified as Level 2 within the fair value hierarchy and is valued using a market approach based on quoted prices for similar instruments traded in active markets. Where quoted prices are not available, the income approach is used to value these instruments based on the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms.

Forward contracts. The fair value of forward contracts is classified as Level 2 within the fair value hierarchy and is valued using observable market parameters for similar instruments traded in active markets. Where quoted prices are not available, the income approach is used to value these forward contracts, which discounts future cash flows based on current market expectations and credit risk.

The estimated fair values of certain of our financial instruments are as follows:

	September 30, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount			Fair Value
	(Unaudited)
			(In thousands)
Balance Sheet Instruments
Cash and cash equivalents	$	638,794	$	638,794	$	570,854		$	570,854
Restricted cash and cash equivalents	$	23,074	$	23,074	$	21,962		$	21,962
Investments	$	58,834	$	58,834	$	139,006		$	139,006
Debt	$	108,286	$	111,901	$	93,735		$	96,187
Forward contracts	$	7,274	$	7,274	$	(5,029	)	$	(5,029	)